Outrage Ensues! Core Data Leaked Early, Sparking Wall Street Fury!

A Blunder!

The Bureau of Labor Statistics (BLS) non-farm payroll data has always been a focal point for the market, but this time, it has triggered collective anger on Wall Street due to a data blunder.

The annual revision of non-farm payroll data shows that employment growth over the past year was significantly revised down by 818,000, marking the largest downward revision in 15 years. However, the market's focus was not on the numbers but on the timing of the data release.

Originally scheduled for release at 10:00 AM Eastern Time, the data was delayed by a full half-hour. Even more shocking, at least three investment banks were reported to have received the data early during this critical half-hour.

Among those who received the information early, BNP Paribas analysts stated that they kept refreshing the webpage without seeing the data, and then "we made a few phone calls to inquire, and they gave us the data."

This news caused an uproar, with expletives flying in trading rooms, while ordinary investors were left in the dark.

The CEO of an investment firm directly lashed out, saying, "The whole thing reeks of incompetence."

Why Was the Data Revised Down?

The annual benchmark revision of non-farm payroll data is a re-estimation of the annual sample total based on census data. This is different from the monthly non-farm revisions we usually see; it is not a revision of data for a particular month but an overall calibration of the entire year's employment situation. The total employment number as of March each year serves as the new year's statistical benchmark. The data released by the BLS indicates that the survey overestimated the number of new non-farm jobs by 818,000 over the past year.

The reason for this situation is that the state of economic growth directly affects the results of sample surveys. When economic growth is strong, sample surveys may underestimate the overall situation, often leading to upward revisions of the benchmark; conversely, when the economy is weak, the benchmark is easily revised downward. The 2024 benchmark revision downward is a normal phenomenon against the backdrop of a weakening economy.

Market Outlook

Opinions on the market outlook are divided.

On one hand, if the Federal Reserve believes that the labor market weakness is temporary, they may adopt a wait-and-see attitude.

However, if data continues to be weak, the likelihood of a rate cut increases. On the other hand, the data leak incident could undermine investor confidence. Once market fairness is questioned, it could lead to a decline in investor confidence, subsequently affecting asset priCES.

Despite the significant impact of the non-farm payroll data revision and the blunder, the market's reaction has not been as volatile as expected.

As of now, the 10-year Treasury yield remains hovering at a low point.

Market expectations for a rate cut in September remain at 25-50 basis points, with little change. Therefore, the market is still awaiting Powell's upcoming speech at Jackson Hole, which is likely to set the tone for the next interest rate trajectory.